Friday, 13 September 2013

Twitter tweets about Confidential IPO

Twitter in its most recent tweet
mentioned that ‘We’ve confidentially submitted an S-1 to the SEC for a planned
IPO. This Tweet does not constitute an offer of any securities for sale’.

Twitter, which has a user base of over
200 million, is undoubtedly the most awaited consumer Internet IPO. The hype
around Twitter IPO will be in full swing since Facebook went public. While
Twitter has many lessons to learn from Facebook’s IPO, as $FB stock price fell
soon after its public debut, however Facebook stock has crossed its IPO price
recently.

What does this Confidential IPO indicate?

According to JOBS Act which was passed
last year, under established SEC rules states that companies that are termed as
‘emerging growth companies’ can be allowed to file their S-1’s confidentially
provided that their annual revenue is less than $1 billion.

Yes, Twitter’s revenue is quite less
than a billion dollars.

Twitter does not intend to disclose its
details as the provision also states that Companies do not have to make their
documents public until 21 days before the company goes on the ‘road show’ to
pitch the company to big investors on Wall Street for the IPO. As per
estimates, under present situation Twitter can have a valuation of between $11
billion to $15 billion, which is subject to change.

PrivCo which gathers information on
private companies, its Chief Executive, Sam Hamadeh, has predicted, ‘Unlike
Facebook, which waited too long to IPO, Twitter will IPO at just the right
inflection point, while revenue grows in triple digits’.